Tax Credits

Tax credits can help you move here – and grow.

Small businesses wanting to come to California or stay and grow in California may be eligible for the “California Competes” income tax credit. Tax credit agreements are negotiated by GO-Biz (the Governor's Office of Business and Economic Development) and approved by the California Competes Tax Credit Committee consisting of the State Treasurer, the Director of the Department of Finance, the Director of GO-Biz, and one appointee each by the Speaker of the Assembly and Senate Committee on Rules.

Manufacturers and certain research and developers may qualify for a partial exemption of sales and use tax on certain manufacturing and research and development equipment purchases and leases. To be eligible for this partial exemption, you must meet all three of these conditions:

Be engaged in certain types of business, also known as a "qualified person."

To be eligible for the New Employment Credit, a qualified taxpayer must obtain a tentative credit reservation from Franchise Tax Board for each qualified employee. The employer must receive the credit reservation within 30 days of completing the new hire reporting requirement with Employment Development Department.